Well, the stage is set. Our candidates are here: Democratic Hillary Clinton and Republican candidate Rick Lazio. I'm joined by our panel of reporters, who'll be joining me in questioning the candidates. First CNN senior political correspondent Jeff Greenfield, "New York Daily News" political columnist Lars-Erik Nelson, "New York Times" columnist Joyce Purnick, and representing "The New York Post," political reporter Greg Birnbaum.

More than 200 people are here in our audience from across the state to watch the second New York Senate debate. We should mention, though, that our Web site viewers have been submitting questions for the past several weeks, and we've incorporated some of those questions into the debate.

First some quick ground rules. Quickly, each candidate will be allowed 90 seconds to answer the question. The other candidate will have 45 seconds to offer a rebuttal. By a flip of the coin, the first question goes to Mrs. Clinton. Mrs. Clinton, figures from the independent budget office show that New York state lost over $200 million in federal aid after Chuck Schumer defeated Senator Al D'Amato and New York no longer had a senator in the majority party. Since the Senate is expected to stay in the Republican hands, how would you deliver for the state of New York as a junior senator from a minority party and a person that the Republicans would clearly want to humiliate?

HILLARY RODHAM CLINTON (D), NEW YORK SENATE CANDIDATE: Well, Marcia, first let me thank you for moderating this discussion. And I thank our panelists and the audience and mostly everyone who's watching at home. And I do want, Mr. Lazio, to put your mind at ease, in case you've been worrying. I won't be coming to your podium today.

(LAUGHTER)

CLINTON: But I will be addressing the issues that are important to New York. And one of the issues I've been talking about ever since I got into this race was how we could get more of New York's fair share. I think this is a problem that Senator Moynihan has put on the table, and we need to really address it. We have a chance to do that because we now have a surplus. One of the biggest injustices is the Medicaid formula. And I've come forward with a plan that would get us more money in New York.

I believe that the objective of the Senate is to do the best job you can for the state you represent, which I intend to do for New York. And I look forward to working with Chuck Schumer, who has been a vigorous and effective advocate.

Now, the problem is that the Republicans have control of the Senate and the House. I hope that changes in this election. I think there's a good chance it will. But the Senate is dominated by people who don't necessarily agree with how we need to do things here in New York, and I would be a vigorous proponent of what we need and an opponent of what would hurt New York. And I would look forward to being a good partner with Chuck Schumer.

KRAMER: Mr. Lazio, your rebuttal?

REP. RICK LAZIO (R-NY), SENATE CANDIDATE: I think this is incredibly important for New York. New York has had a history, up until this last election, of having one senator in each party of influence. I'm looking forward to working with Chuck Schumer in the Senate. I work with him in the House. I've been in the minority and the majority. And let me tell you, I know that in the majority, it's the people in the majority who craft the bills, who write the language, who are in a position to actually get the job done.

Now, New York sends $15 billion a year more to Washington than we get back. I think we need somebody in the majority party who can well -- work well with others, who can cross party lines, who can be independent and who's got the ability to make sure that New York gets its fair share. And I think I'm that person.

KRAMER: OK, Mr. Lazio, our viewers wanted to know about your relationship with Newt Gingrich. Mr. Lazio, you were the deputy whip under Newt Gingrich at a time when government was actually shut down, and you voted under the "Contract with America" to shut down the United States Department of Education. Are you proud of the work that you did, and do you think that the Gingrich policies were good for New York?

LAZIO: Well, first of all, Marcia, I would say that's not accurate. What we did do is to try and send bills to the president, which the president vetoed. In fact, it was the work of people like me on the Budget Committee that got to the first balanced budget in a generation. And the fact is, on education, for the last three years, I voted for the highest levels of federal aid to education in our history, in part because we made the tough decisions back in 1994.

Yes, we voted to balance the budget. Yes, we voted for Welfare reform. It's had the result here in New York of sending hundreds of thousands of New Yorkers back into the workforce, ending dependency. Yes, we voted for a strong national defense. I believed in those things then. I believe in those things now. And I think the votes that we took back then helped put us on the path where we're able to make the investments in education, where we're able to reduce the Welfare rolls, where we're able to reduce taxes and create jobs here in New York.

KRAMER: Mrs. Clinton?

CLINTON: Well, it's not my opponent's association with Mr. Gingrich that bothers me, it's the fact that he voted with him. He voted with him time and time again to shut the government down, to eliminate the Department of Education, to cut $270 billion from Medicare.

Now, this is not ancient history because just last week on "Meet the Press," when he was asked what he thought about those votes, he said that Gingrich was a figure of historic importance, and he had absolutely no regrets.

I think we need someone representing New York who would not have voted with Newt Gingrich. If it had not been for President Clinton, the government would have been shut down and many of the programs that my opponent now talks about wouldn't even be in existence anymore.

KRAMER: OK, Mrs. Clinton, we asked our viewers to come up with some questions for this debate, and we were surprised at what they wanted to know about you. They want to know more about you as a person. Quite frankly, Mrs. Clinton, they wanted to know why, after all the revelations and pain of the last few years, and because you are such a role model, why you stayed with your husband.

CLINTON: Well, you know, Marcia, I've answered that question and I've addressed it in various forums. For my entire life, I have worked to make sure women had the choices they could make in their own lives that were right for them. I've made my choices. I'm here with my daughter, of whom I'm very proud. We have a family that means a lot to us. And I'm going to continue to stand up and speak out for what I believe, what I think is important. And many of my experiences in my life will give me insights into what I can do to be a good senator.

You know, I've had first-hand experience in balancing family and work. I've had to worry about making sure that my parents, my late father and my mother, were well taken care of, as well as taking care of my daughter. The choices that I've made in my life are right for me. I can't talk about anybody else's choice. I can only say that mine are rooted in my religious faith, in my strong sense of family, and in what I believe is right and important.

I want to go to the Senate to stand up for women's choices and women's rights, as I have done around the world in every chance that I've been given. And I want to be sure that there's a voice in the Senate that reminds us that with all the advances that women have, we're still threatened with the right to choose that might disappear if the wrong person is elected president, the wrong people are elected to the Senate. So I think my experience as a woman, as a person, will make me the kind of senator who will really understand what's at stake.

KRAMER: Mr. Lazio, rebuttal?

LAZIO: Well, I think this was Mrs. Clinton's choice, and I respect whatever choice that she makes. The fact is that this race is about the issues, about who can be most effective for New York, that who has got the skills to build bipartisan alliances and get the job done, who can go out there and make sure that New York gets its fair share.

Mrs. Clinton raised this issue, as she has before, on the so- called cut in Medicare. It's false. "New York Daily News," in an editorial, called it false. In fact, we would be spending more money this year on Medicare than we would have under the president's budget last year if we would have supported the bill that she criticizes now. The fact is, that we've been increasing our commitment to Medicare, and I think New Yorkers should know that.

KRAMER: OK, Mr. Lazio, choice is a big issue in this campaign. The next senator from the state of New York will have to approve as many as four Supreme Court Justices. I'd like you to take a look at the nine current members of the Supreme Court and tell me which one specifically most typifies the kind of jurist you would vote for and why.

LAZIO: I would -- may I? I would say Sandra Day O'Connor. I think she had the right -- she's got the right intellect, the right experience. She has a respect for precedence. I think she has had a distinguished career on the bench. And that's what I think a senator should look for when it comes to confirmation.

And this is consistent with, frankly, what both Vice President Al Gore said and what Governor Bush said in their debates. Look for the most experienced, qualified person, no litmus tests. Let's make sure we get somebody who has a healthy respect for precedent, who's got the ability to make good decisions and who's got a -- hopefully, a good experience of being on the bench and having the temperament that we would want to have as somebody who's going to be serving on America's highest court.

KRAMER: Mrs. Clinton?

CLINTON: Well, I think that the fate of the Supreme Court hangs in the balance in this election. If we take Governor Bush at his word, his two favorite Justices are Scalia and Thomas, both of whom are committed to overturning Roe v. Wade, ending a woman's right to choose. I could not go along with that. In the Senate, I will be looking very carefully at the constitutional views that any nominee from, I hope, Vice President Gore, but in the event, unfortunately, of President Bush, as to what that nominee believes about basic, fundamental, constitutional rights. Just as I could not support a nominee who would vote to overturn Roe v. Wade, I wouldn't support someone who would vote to overturn Brown versus Board of Education. I have strong feelings about fundamental constitutional rights that I would take with me to the Senate.

KRAMER: OK, the next question is from Jeff Greenfield of CNN to Mrs. Clinton.

JEFF GREENFIELD, CNN SENIOR POLITICAL ANALYST: Mrs. Clinton, there are Democrats -- Senator Bob Kerrey one of them -- who thinks it's a good idea that workers should be able to take some of their money and invest it on their own. Your -- you say that's too risky, that the government's going to do that for them.

There are Democrats like Bob Reich, former labor secretary, who says it's really important that poor folks maybe get vouchers to get them out of a failed public school system. You're adamantly opposed to vouchers for those folks without the means, they're going to -- it's public schools or nothing. And there are Democrats -- John Kennedy was one of them -- who favored across-the-board tax cuts. You favor targeted tax cuts, which means that they go to people who engage in activities the government approves of.

My question is why are you so reluctant to let people without means make the choices that more affluent people make for themselves?

CLINTON: Well, Jeff, I believe strongly in empowering people to make the best decisions in their own lives. With respect to the Democratic Party, we have a broad range of views. There are Democrats who don't agree with me on a balanced budget or Welfare reform or the death penalty. So there's a very vigorous debate within the Democratic Party.

With respect to the issues you've raised, I think we are currently underfunding our inner-city schools, our urban school districts. I could not go along with siphoning money off for vouchers that would take money away from the schools that I go into around this state, schools that teachers are teaching in partitioned hallways, where the teacher has the only textbook in the classroom. Any voucher scheme that I've had described to me would be either too little or raise constitutional objections.

We know what works now in public education. If we can get class size down, if we can provide qualified teachers, if we can focus on the learning objectives, then I know that we can make a difference, and I have a plan to do that I've set forth in great specific detail. And we have differences, my opponent and I. I support adding 100,000 teachers to lower class size. He has voted against that. I support the bipartisan school construction funding authority that would permit New York to have the school construction it needs without raising property taxes. He's opposed that.

So on these issues, there is certainly vigorous disagreement, but I believe that when you have 90 percent of our children in the public schools, we need to pay attention to giving the public schools the resources they need.

KRAMER: Mr. Lazio, your rebuttal?

LAZIO: Well, I think we've heard some fiction. Now let's try the facts. I have voted twice to support hiring additional teachers for the classroom. And under my plan that I support, New York would not get shortchanged. Under Mrs. Clinton's plan, New Yorkers would once again be subsidizing Southern states.

Number two, I would say that I am in agreement with people who believe in empowerment, Jeff, who trust people. I think it's immoral to force a child to go to a school where they can't learn. There are over 107 schools in New York where children are trapped in failing schools. Some schools have been failing for 10 years. Poor parents want to have the choice to give their children the education that I want for my children. And they deserve to have that choice. They deserve to have their children go to a school where they can learn. I trust parents to make that decision, and that's a major philosophical difference.

KRAMER: Jeff, your next question is to Mr. Lazio.

GREENFIELD: Mr. Lazio, we heard Mrs. Clinton say she supports a woman's right to choose. I'm going to ask you, and I hope Mrs. Clinton, to help us see how you'd finish the sentence. Right now, a woman can choose to have an abortion for pretty much any reason: health, life, if she gets a sonogram that says she's carrying a girl and she wants a boy. And depending on what state you're in, she can abort that -- choose to abort a child either six months into the pregnancy or perhaps almost up to birth.

And I would like to know specifically, do you believe there are some circumstances where the government, as a matter of law, should say to a woman, "Under these circumstance, you don't have a right to choose"?

LAZIO: Well, I had a pro-choice record in the House, and I believe in a woman's right to choose, and my record clearly reflects that. But I do support a ban on partial-birth abortions. I think most New Yorkers support a ban on partial-birth abortions. Senator Moynihan called it "infanticide." Even former mayor Ed Koch agreed that this was too extreme a procedure. This is an area where I disagree with my opponent.

My opponent opposes a ban on partial-birth abortions. She is supported by NARAL, that is so extreme on this issue that it wants to kick the Vatican out of the U.N. because of its positions. And one of her supporters is a person who developed partial-birth abortions and who's done it hundreds of times. I don't agree with that. I think that's where we draw the line, on partial-birth abortions, but I do support a woman's right to choose, and my record reflects it.

CLINTON: Well, my opponent is just wrong. I have said many times that I can support a ban on late-term abortions, including partial-birth abortions, so long as the health and life of the mother is protected. I've met women who faced this heart-wrenching decision toward the end of a pregnancy. Of course it's a horrible procedure. No one would argue with that. But if your life is at stake, if your health is at stake, if the potential for having any more children is at stake, this must be a woman's choice.

Now, the Republicans, rather than wanting to craft legislation that would carve out the constitutional exception that Sandra Day O'Connor pointed to in her most recent decision about life and health, instead they'd rather play a political football game with this and put women's lives and health at risk.

KRAMER: OK, the next question is for Mrs. Clinton from Lars-Erik Nelson of the "Daily News."

LARS-ERIK NELSON, "NEW YORK DAILY NEWS": Ms. Clinton, good morning.

CLINTON: Good morning.

NELSON: In 1993, you were part of the health care task force that tried to extend coverage to more Americans -- in fact, all Americans. That failed, as you know. Now Mr. McDermott from Washington and Senator Wellstone from Minnesota both have universal coverage bills on the -- in the Congress. If you were elected, would you support those bills, or do you think -- have you been burned by the previous experience so you'd want to do it step by step?

CLINTON: Well, I'd rather refer to it as having been a learning experience, Lars Eric, because indeed, it was. And one of the things that I learned is that I think we need to take step-by-step progress toward the ultimate goal of providing quality affordable health insurance for every American. That's why when we weren't successful, I got back to work and worked to end drive-by deliveries, worked to expand Medicare to include mammography and worked especially on the Children's Health Insurance Program, which is doing very well here in New York, as a good example of what can be done.

I think that what we have to do now is add on these successes. That's why I'd like to expand the Children's Health Insurance Program further, all the way up to families making $51,000 a year. I'd like to make it possible for people between 55 and 65 to buy into Medicare. I'd like to make it also possible to deduct some of the cost of health insurance from families that don't have employer-based health care and aren't eligible for one of the publicly-supported programs. I want to see mental health considered on parity so that we treat a mental illness the same as we treat any other illness. But there are big differences between me and my opponent. He's opposed the real "patients' bill of rights" that is supported in a bipartisan coalition, as well as by 300 medical and health groups. And he's gone for the Republican version of the prescription drug benefit on Medicare, which wouldn't cover 650,000 New Yorkers and millions of Americans.

So there's work to be done, and I'd like to be part of that work.

KRAMER: Mr. Lazio, your rebuttal?

NELSON: Yeah.

LAZIO: First of all, let me just say that Mrs. Clinton's plan in 1993 would have been an unmitigated disaster for New York. No New Yorker would ever have written a bill that would have led to 75,000 jobs being destroyed, health care rationing and the destruction of many of our teaching hospitals, which are an incredible asset for New York.

I support biomedical discovery. I want to continue our search for a cure. That's why I've -- I have supported doubling the amount of money that we spend on health care research. I don't just talk about it, I have actually voted for deductibility for those employees who are not covered by an employer's plan to drive down the real cost of health care insurance and to allow full deductibility for the self- employed, which is an increasing percentage of New York's population in this new dot-com economy.

KRAMER: Lars, do you have another question for Mr. Lazio?

NELSON: Mr. Lazio, yes, sir. Good morning.

LAZIO: Good morning, Lars.

NELSON: The Senate is a lot closer than anybody once thought to maybe changing hands. There are races where Democrats are doing better and Republicans are doing worse. That would mean your election here as a senator could keep the Senate in the hands of a party that pretty much despises this state. We have Jesse Helms as chairman of Foreign Relations. We have Orrin Hatch as chairman of Judiciary. Why should a New Yorker want to vote to keep that line-up?

LAZIO: Let me, first of all, disagree with your characterization, Lars, with all due respect. As a matter of fact, Republicans who have run this state, like Governor George Pataki, who's in this audience -- I want to acknowledge him -- have turned this state around, have helped create hundreds of thousands of jobs and opportunity for New York, have driven down the Welfare rolls, that have helped New York, and Mayor Giuliani, who has brought safety back to our streets of New York City.

These are Republicans who care about New York and who are effective. And I think for New Yorkers, they need to have people that are effective legislators, who are effective representatives, and to have one person in each party. Now, we already have Chuck Schumer, who is a Democrat, and he's got his foot in one party. I think it's important for New Yorkers to have somebody who has a foot in the other party of influence. I disagree with you. It's the Republican Party.

But whether it's the Republican Party, Lars, or the Democratic Party, the point is, is that we want somebody who's got the flexibility, the independence, who's got the ability to cross party lines and work well with others to be effective and get the job done. That's what I've been doing as a member of the House of Representatives, to help New York on children's health, on protecting New York and its transpiration formulas so that we can take care of our critical transportation needs, to make sure that we -- we provide enough affordable housing for our seniors, for the disabled. I've written legislation to do that.

I've worked closely with the people of New York to make sure that New York got treated not just fairly but well. That's because I am from New York. I'm from this state. My friends and family are here. My roots are here. And I'm going to protect and put New York first...

KRAMER: Mr. Lazio, your time is up.

LAZIO: ... every single day in the Senate.

CLINTON: Well, I don't think I could defend Jesse Helms and Trent Lott and the people that Mr. Lazio will have to vote for. His first vote will be for continuing Trent Lott's majority leadership, unless what I think will happen, and that is the Democrats take over.

You know, I believe in bipartisanship, but there are certain things you cannot support, and there are certain votes that I would never make. And I would never be beholden to a Republican leadership that would say, "OK, it's time for us to have another one of those votes that we need." If you go back and look at my opponent's record, time and time again he's cast his lot with people who have not had New York's best interests or America's best interests in mind, as far as I'm concerned.

I think it's very likely that we'll have a Democratic Senate, but in any event, Chuck Schumer and I will be there fighting for New York.

KRAMER: OK, the next question for Mrs. Clinton is from Joyce Purnick of "The New York Times."

CLINTON: Good morning.

JOYCE PURNICK, "NEW YORK TIMES": Good morning.

CLINTON: How are you?

PURNICK: Mrs. Clinton, I wanted to ask you about the drug war. We have been hearing increasingly from people on both sides of the aisle that it isn't working too well. A lot of people are saying that, in fact, it's failed, we've lost the drug war. We're spending $20 billion in federal money. There's still addiction. There are still -- there's still demand. There's still supply. And we have millions of people, many of them minorities, in prison. Some of them are there -- in fact, many of them because of non-violent, low-level drug connections and drug actions.

My question is, given the ramifications of this policy, and the cost, why the silence? Why haven't we heard from you -- and from you, Mr. Lazio, you will be rebutting on this question -- about an issue that has such an impact on so many people in this country?

CLINTON: Well, I have spoken out for quite some time, even before this race, on my belief that we should have drug courts that would serve as alternatives to the traditional criminal justice system for low-level offenders, for users. There are good examples around the country where such a court serves as a diversion. If the person comes before the court, agrees to stay clean, is subjected to drug tests once a week, at the end of the year, they are diverted from the criminal justice system.

I also believe strongly that we need more treatment. It is unfair to urge people to kick a habit, to get rid of their addiction, and not have the treatment facilities available that will be there when someone finally makes up their mind to go and get treatment.

On both of those counts, I think we have not done enough. And in the Senate, I would fight for especially New York having the kind of diversionary programs, more of them than what we do have now, but around the country it's important because drugs, as we know, go across borders. And I would fight hard for more treatment.

You know, we've made progress, though. I would have to take some issue with that. We have survived the terrible crack epidemic of the 1980s. We have a dropping rate of drug usage among many of the population groups in our society. But I couldn't disagree that we have more to do, and we should try different strategies that will make us more successful in both cutting the supply and the demand so that people can live without drugs.

KRAMER: Mr. Lazio, your rebuttal?

LAZIO: Yeah. The truth is, Joyce, that, as a matter of fact, under this administration, under the Clinton administration, there has been a dramatic and troubling increase in drug use and drug abuse by our children. And that has not been addressed. In fact, it was many of us in Congress who sought to develop drug -- anti-drug tests for us at the community level.

I crossed party lines in 1994 and built a coalition of Republicans that passed the crime bill. If it were not for that, we would not have drug courts right now. We would not have community policing. We would not be addressing some of the prevention strategies that we are addressing now. We need to do a better job. But the fact is, we need to have somebody in Washington who's got the ability to cross party lines, to be independent, to bring others with him...

KRAMER: Mr. Lazio...

LAZIO: ... to get the job done.

KRAMER: ... out of time. The next question is from Joyce Purnick to Mr. Lazio.

PURNICK: I still don't know why you don't talk about it in the campaign, but I will move on.

(LAUGHTER)

PURNICK: I'd like to ask you about an issue that's come up i8n the last few days, which is campaign finance reform. I think it's fair to say that voluntary deals are not the best way to go about this, as we have learned. It's almost impossible to pull off. The McCain-Feingold bill that both of you support has loopholes and raises constitutional questions.

My question for you, Mr. Lazio, is will you reconsider supporting public financing of campaigns, as we have in New York City? Mayor Giuliani is here. You can ask him. He's a Republican. I believe he supports it. He participated in it. Can you change your mind and consider it, since it seems that everything else, when dealing with what John McCain says corrupts us all, seems not to work?

LAZIO: Well, I think, first of all, you correctly note that I have supported McCain-Feingold -- actually, Shays-Meehan in the House -- twice. I voted for a whole range of different campaign finance reform measures. And I have run this campaign with that intention by abiding by McCain-Feingold. We have not raised nor spent a dime of soft money to air any commercials in this race.

I do not agree with public financing because I think that people, the voters should decide who actually is elected. I think people should demonstrate that they get some grass-roots support. I've gotten the support of over 100,000 people who have given me, on average, checks of under $100. There's absolutely nothing wrong with that. I don't think that we should have Welfare for politicians.

I don't think the taxpayers should be forced to support a candidate that they don't believe in. I think it's the essence of democracy, frankly, for us, as people in public office and candidates, to go out and to make the appeal and to talk about the issues, talk about our experience, talk about whether or not we can be effective in representing them, and for people to make that choice as to whether or not they contribute.

I think that's very important. That's what I support.

CLINTON: Well, I certainly could support public financing. I have said that in the past. I think we need to change the system of campaign financing. But I just have to remark that Mr. Lazio's campaign violated the very simple agreement that we entered into. It was a self-enforceable agreement that anyone could follow and see whether we were abiding by it. "New York Times" editorial yesterday put it very well when he said that it violated the terms of the campaign financing agreement.

You know, last month, Mr. Lazio said that this was an issue of trust and character. He was right. And if New Yorkers can't trust him to keep his word for 10 days, how can they trust him for six years on issues like Social Security, Medicare, prescription drugs and education?

KRAMER: Mrs. Clinton, you were recently honored by the World Jewish Congress for your efforts to help Jewish victims of the Holocaust, many of whom worked in slave labor camps during World War II, and you helped them to get reparations from Switzerland, Germany and many other countries. My question is, are you now willing to help African-Americans whose ancestors were slaves here in the United States get reparations from our country for their years of slavery?

CLINTON: Marcia, I was very honored to be one of the people mentioned and given an honor by the World Jewish Congress for the work that -- although mine was a minor role, the work that led to the recovery of those assets. That was an important piece of history that had to be put to rest.

And on issues of reparations with respect to African-Americans, native Americans, we have some mental and emotional and psychological reparations to pay first. We have to admit that we haven't always treated the people in our own country fairly. We have some issues that we have to address when it comes to racial justice right now. So I'm willing to work hard to be a strong advocate for Civil Rights and human rights here at home and around the world. I want to do everything I can to make sure that the programs and policies that have helped generations of African-Americans have a better life in this country continue.

I think we should be focused on the present and on the future. I was very moved when I visited Gory (ph) Island twice, first on my own with my daughter, and then with my husband. And we do owe, as my husband said that day, an apology to African-Americans for hundreds of years of slavery. But I think that the people I know and the people that I work with want us to stay focused on the future, keep our economy going, keep providing good public education, quality affordable health care, do the things that will enable people to have the best futures for themselves. And that's what I'm committed to doing.

KRAMER: Mr. Lazio, your rebuttal?

LAZIO: Yeah. I need to go back to the last question, if I can. Mrs. Clinton, please, no lectures from Motel 1600 on campaign finance reform.

(LAUGHTER)

LAZIO: I mean, the fact is, I took a legitimate contribution of clean hard money. My opponent objected. So because I have such a commitment to campaign finance reform and to this agreement that I fought so hard for, I refunded the money. I did that quickly. I did it responsibly. And I did it ethically.

Now, on this issue, let me say this. As someone who serves on the Holocaust Assets Commission, as somebody who wrote legislation to extend the commission and to fund the commission, I think this work is incredibly important. I believe in it deeply. I also believe that it is time for us to move past the issue of reparations among African- Americans and work for ways in which we can bring more opportunity and better educational opportunities to African-American children.

KRAMER: Mr. Lazio, your time is up.

And you get the next question. Mr. Lazio, a federal...

LAZIO: Please.

KRAMER: ... a federal panel has attacked the New York City Police Department for racial profiling. Mayor Giuliani has heatedly denied that there's racial profiling, but I ask you, do you agree with the federal panel? And what do you think should be done? Do you think a federal monitor should be appointed to oversee the New York City Police Department?

LAZIO: I believe that New Yorkers can take care of New Yorkers. I don't think we need more federal monitors in here to either tell us who we're going to resolve our land claims situation, kick off private land owners, which is what the Justice Department does or attempts to do, and try to tell us how to keep our streets safe. In fact, the streets of New York are at their safest point ever.

Do I believe in racial profiling? No, I do not. As a former prosecutor, I know that we can do the job without that tool, and we should do the job without that tool. We need to build confidence. Youth community policing. And I think the Giuliani administration has been doing the job for the people of New York. The streets are safer. People can go out again. You see children being wheeled around in carriages, and that's a good sign, families coming back into New York City. It's because people believe that the quality of life is increasing in New York City because of the work that's been done and the partnership that's been developed between Mayor Giuliani and Governor Pataki. And they're going to add one more partner next year in the Senate: Rick Lazio.

KRAMER: Hillary, a rebuttal?

CLINTON: Well, I would just point out to Mr. Lazio that the criticism of your grasping for loopholes came from the "New York Times," not from me.

I disapprove of racial profiling and believe that there's no room for it in any law enforcement effort. The report that's been referred to hasn't even been released yet. I'm going to withhold judgment on that.

But I've spoken out about the need to rebuild trust between our police officers who put themselves on the line every single day and the communities that they're pledged to protect. I want to go to the Senate to make sure that our police have the resources and tools they need to do the very best job, but I also want to go to make sure that our communities feel safe and well-protected. We need to protect and respect, and that's the kind of formula that I'll take to the Senate.

(END VIDEOTAPE)

SESNO: And when CNN's coverage of today's New York Senate race continues, the candidates tackle...

(END VIDEO CLIP)

SESNO: I'm Frank Sesno in Washington. Welcome back to a special edition of CNN's election 2000 coverage, today's New York Senate debate between first lady Hillary Rodham Clinton and Congressman Rick Lazio.

In this exchange, the candidates address issues ranging from city planning to crowded U.S. skies to the current crisis in the Middle East.

(BEGIN VIDEOTAPE)

GREGG BIRNBAUM, "NEW YORK POST": The United Nations Security Council has just passed a resolution condemning the excessive use of force by Israel against the Palestinians, but the resolution makes no mention of violence against Israelis. Some consider this to be one of the most anti-Israel resolutions in years. The United States didn't oppose it. The United States abstained. Mr. Lazio said the U.S. should have used its veto power and he charged the Clinton administration has unjustifiably vacillated in its support of Israel.

A statement released by you last night makes no mention of the United States' abstention. Do you believe America did the right thing?

CLINTON: No, I believe we should have vetoed it. I believe that it was a wrong move not to have vetoed it, that it was inaccurate and one-sided. It did not address the violence that I believe is fomented by Chairman Arafat and the Palestinian authority. It did not address what Israel has tried to do, such as showing good faith by pulling out of Lebanon and the fact that there's violence on that border. I was very disappointed because to me, the responsibility lies clearly with Chairman Arafat. I've said that on several occasions over this past week.

But we have to focus on ending the violence. It is escalating out of control. We're seeing the capture of Israeli soldiers, the desecration of Joseph's tomb. It's imperative that Chairman Arafat do everything in his power immediately to end the violence and that people get back to the negotiating table to try to resume moving toward a comprehensive peace settlement that would make it clear that Israel's security would be safe and guaranteed.

The United States remains the guarantor of Israel's security, and in the Senate, I would certainly be a strong voice for doing whatever was required. I've also called on ending -- on conditioning aid to the Palestinians on their willingness to end violence, on their willingness to rid their textbooks of anti-Semitic and anti-Israeli statements. I feel very strongly right now that we're at a moment of danger and peril. We need to have everyone speaking out, and Chairman Arafat and the Palestinians must respond.

KRAMER: Mrs. Clinton, that was time.

Mr. Lazio, your rebuttal.

LAZIO: Well, Gregg, you correctly noted that, in fact, I did issue a statement immediately disagreeing and expressing my strong disappointment with the -- America not using its veto power. I don't know why we have a vote if we don't exercise it in a case like this.

For several generations and for -- and several administrations from both parties, we have had unequivocal support for the state of Israel. This sends all the wrong messages about whether or not we stand firmly behind our Democratic ally in the Middle East. They need to know that we stand behind them, stand by their side.

I do not support call for a Palestinian state. My record is one of 100 percent consistency for the security of the state of Israel and for our alliance.

KRAMER: Gregg, your next question.

BIRNBAUM: Mr. Lazio, I'd like to ask you about a quote from one of your recent speeches. I'll read it. "I think this is the most important race of my generation. This is a race that will determine whether character still counts in public service, whether or not integrity matters, whether the rule of law applies to all or just to some privileged people." That was in Watertown on September 29th. But you say those words almost every time you address a crowd. So I'd like to ask you to explain them and how they apply to Mrs. Clinton.

LAZIO: Well, let me talk about how they apply to Mrs. Clinton. I think it's more important that I talk about myself. For 17 years, I've served New York. I've served as a prosecutor, as a local legislator. And for the last eight years, I've served in the United States Congress.

I'm known as somebody who brings people together. I'm known as somebody whose word you can trust, you can work with. I believe that I have demonstrated an integrity in terms of my public service, and I've been effective for the people of New York. That's why the people of my district that sent me back by the widest margins in the history of my district: because they know they can count on me, that they believe in me. And they know that I will vote my conscience.

So when I say that, I think that what I'm trying to say is that I try to be a man of character. I try to be a good role model for my two little girls, Molly and Kelsey (ph), who are going to second and third grade right now. I'm going to try and be a good role model to other children as well. I'm going to stand up for the values that I believe have made New York strong.

As a grandson of immigrants that came over, saw the Statue of Liberty and then got processed through Ellis Island, as a son of a son small business owner that came back from World War II without a dime in his pocket and fulfilled his dream to start a small auto parts store, and now as somebody who's lived the dream himself of being able to go to represent the people of New York in Congress, I believe I have, not just an obligation but it's my sense of honor to go out and to make sure that I do the job the way I think they want me to do it. KRAMER: Mr. Lazio, your time is up.

Mrs. Clinton, your rebuttal.

CLINTON: Well, you know, I'm also the granddaughter of immigrants and the daughter of a small businessman, but I was raised to believe that we had to look out for each other and that we had to be willing to work hard to provide opportunities for ourselves, our families and others. I can't even imagine ever voting with Newt Gingrich to shut our government down. I can't even imagine being on the side of those who time and time again vote against our most fundamental beliefs, voting for the first two welfare reform bills that the president had to veto that would have been devastating to New York.

And time and time again, if you look at my opponent's record, he'll only tell you half the story. You've got to look behind it to understand exactly what he's talking about. You can just take me for what I say when I tell you that I will work for the issues I've worked on for 30 years.

KRAMER: OK, Mrs. Clinton, recently, a number of proposals have been put forth to build the large dome stadium on the west side of Manhattan. Do you think that taxpayer money should be used to build such a stadium?

CLINTON: Well, with all due respect to Mayor Giuliani sitting in the front row, the answer is no, I don't. I love sports and I love the opportunity for people to go to sports, but I don't think that's a good use of that space and place or of taxpayer dollars.

I think there is a lot of work that we need to do to upgrade the infrastructure of New York. That's why I support the Second Avenue subway. That's why I support the East Side connector, why I would support a rail link to La Guardia and to JFK. There is work we need to do to repair our bridges and roads, to make sure that we're prepared for the 21st century.

I've worked very hard to educate myself about all the infrastructure needs that are required around the state of New York because I think we have to follow in Senator Moynihan's footsteps and saying that we need to have public buildings and public works that really reflect the greatness of New York. I will go to the Senate to continue the work on Penn Station and others that Senator Moynihan has started.

And one of my fundamental disagreements during this campaign with my opponent was when he called for the repeal of the gas tax. Now the gas tax is one of those few taxes that New York actually gets more money from Washington than we send, and we are totally reliant on it to do things like finishing I-86 in the southern tier or the fast ferry harbor works up in Rochester, as well as the work we need to do here in the city.

So you can count on me to support infrastructure, but I'm sorry, mayor, I can't go with the dome stadium. (LAUGHTER)

KRAMER: Mr. Lazio, your response.

LAZIO: First of all, let me say this. I think it's important that New York gets the Jets and the Giants back here. I think it's important that we have a focal point, where we build economic development. And this is not just a plan for a stadium; it's also a plan for expansion of convention space, which is very important.

I think private money needs to be on the line here as well, though. I don't think this should be funded with public money entirely. But I believe that this is an important development, an important initiative to try and build jobs, more jobs for New York.

I should note, and I think my opponent knows this, that when I did call for the repeal of the gas tax -- I know she loves the gas tax, but let me say this. We would not take one dime from the trust fund. We made that clear when we had the proposal. I voted against the gas tax cut in 1993.

KRAMER: Mr. Lazio, your time is up.

LAZIO: I'm opposed to it now.

KRAMER: Your time is up but you get another opportunity to talk because I'm going to ask you another question.

LAZIO: Good.

KRAMER: Mr. Lazio, how would you address the dichotomy that has developed over regional jet air service in New York? On the one hand, upstate New York is woefully under served with direct flights, while in New York City and in the metropolitan area, the world's most congested air space, is plagued with delays and delays and delays. And airports like La Guardia have run out of runway space.

Now with Air 21, the federal government is allowing airlines to add hundreds of flights. In fact, at La Guardia alone, they're allowing them to add 200 flights a day to the 1,200 that already depart from that airport. How would you propose to fix this?

LAZIO: I think, first of all, we need to open up more of these slots to lower costs, competitive airlines that will bring the kind of quality service at low cost to some of our upstate areas that they desperately need to thrive economically. I did that down in Long Island. We partnered together with the local level with the town supervisor that controls the airport, a guy by the name of Pete McGowan (ph).

We made sure we went after Southwest Airline. I did my job. We made sure we delivered the federal dollars that were necessary to upgrade the airport so it made it more attractive for Southwest to come in. And because they came into Isup (ph), they're now going into other areas throughout upstate at costs that are very low. That's good news. It's good news for other airlines, other low-cost airlines that come in and to compete with Southwest.

I think the point is is that you've got to have the ability to work with local people to get the job done, to stay focused, to deliver federal resources. That's my experience. I think we need to make sure that we do not overburden our capacity for having safe flights in and out of our two busiest airports: JFK and La Guardia.

I also think it's important, though, for us to continue to open up new slots for lower costs, discount airlines, to service the upstate economy and those airports down on Long Island as well.

CLINTON: Well, I agree with what the congressman said. I think that we do need to make sure that those increase in slots will provide more low-cost transportation up to upstate. That's been part of my specific upstate economic plan for a year now, that we need to do more to get the price of transportation down and get the adequacy of it up all across upstate.

But I think we also have to be very concerned about the environmental effects and the safety implications of any expanded service. I think that we have to look carefully at La Guardia and JFK to make sure that we prioritize among the flights that are going in and that we don't overburden those flights and the neighbors who live in those areas who are already suffering under a lot of noise and other inconvenience to them.

KRAMER: Mrs. Clinton, your time is up. I have another question for you, though, so you can continue if you want to. But I'd like to ask you how you stand on Federal Bill 602P. I'm going to actually tell you what it is.

CLINTON: I have no idea.

(LAUGHTER)

KRAMER: I'm going to tell you what it is. Under the bill that's now before Congress, the U.S. Postal Service would be able to bill e- mail users five cents for each e-mail they send even though the post office provides no service. They want this to help recoup losses of about $230 million a year because of the proliferation of e-mails. But if you'll just send 10 e-mails a day, that would cost consumers an extra $180 a year. So I'm wondering if you would vote for this bill. And do you see the Internet as a source of revenue for the government in the years to come?

CLINTON: Well, based on your description, Marcia, I wouldn't vote for that bill. It sounds burdensome and not justifiable to me. I have been a supporter of the moratorium on taxation on the Internet. I think that we do have to let loose this extraordinary communication device and see how far it can go in connecting people up. And I'd like to monitor this closely and take a look at it in the time when the moratorium expires.

But is important that we do everything we can do build the infrastructure of New York to take advantage of the Internet. I have been all over this state to all 62 counties and I've been in countless schools, and some of them are the best in the world and the most highly wired and others are not. If we're going to take advantage of the new information economy, we have to be sure that all of our citizens and particularly our children are well prepared. That's why I have proposed high-tech infrastructure bonds as part of my economic plans that would enable us to provide low-cost Internet access and broadband access around the state. It's why I hope that we'll do a better job in providing the computers and Internet access to all of our children and all of our schools so that no child gets left behind. And it's why we need to close the digital divide throughout the state.

New York should be as Silicon Alley is: a beacon magnet throughout the state for the new economy. And I want to be partner with local officials, business, labor and others to make sure that happens. So I don't want anything to interfere with that kind of opportunity.

KRAMER: Mr. Lazio, your rebuttal.

LAZIO: I am absolutely opposed to this. This is an example of the government's greedy hand in trying to take money from taxpayers that, frankly, it has not right to. We need to keep the government's hands off the Internet. It has a capacity for creating more jobs, more high-paying jobs for New Yorkers than any other potential sector in the future. That's why I have voted for a moratorium on taxes on the Internet. That's why I have a hundred percent record on high-tech issues because I know that's important to New York.

I've been building partnerships with local businesses to create jobs for our young people. And I'll tell you, it's very, very important for us to keep our taxes low. And I distance myself, frankly, from Mrs. Clinton's 15 different support -- 15 different tax increases...

KRAMER: Mr. Lazio, your time is up but I have another question for you.

LAZIO: OK.

KRAMER: I'd like to direct your attention again to the Middle East and to what is believed to be the thing that started it all off. And that was Ariel Sharon's visit to the Temple Mount. It has now escalated in Israel to the point where just yesterday, Palestinians attacked the sacred Jewish shrine, the tomb of Abraham. I'm wondering if you blame Ariel Sharon for setting off the violence and how you can guarantee Israel that other shrines it might have to give up in the peace process would not fall in a similar situation and can be protected.

LAZIO: I think that every Palestinian, every Israeli, every Jew from the world is really entitled to have access to Temple Mount. I don't think the fact that Ariel Sharon went there led to the violence. Let's put the blame where the blame is due and telling Yasser Arafat -- Yasser Arafat is the one who unleashed the violence. Yasser Arafat is the one who has been developing camps for Palestinian children to learn how to kill Israeli children. That's absolutely wrong. The violence has occurred as a result of an orchestrated effort to try and undermine, I believe, the peace process. And I think the responsibility lies with Yasser Arafat. That's why it was so important for America to exercise its veto yesterday, and it failed to do that, and I'm greatly disappointed about that. That's why it's important for America not to vacillate, to stand in an unequivocal way and say, "We're going to stand four square behind the security of Israel." That's what I have done for my entire career in Congress because it's the right thing to do, because I believe that the survival of the Jewish people throughout the world depends on the survival of the Jewish state.

KRAMER: Mrs. Clinton.

CLINTON: Well, I have said that I think any person who shows respect toward any religious shrine or holy place should be permitted to visit. So I cannot point a finger or blame someone who did that. It should be open to all people. In fact, since Jerusalem was once again under Israeli control, that has been the case, that Jews, Christians, Muslims are all welcomed to come to the holy places that they revere.

The blame does belong on Chairman Arafat and his refusal to exercise his total authority and complete power to end the violence. People are losing their lives. Israeli soldiers are being captured, tombs are being desecrated. This must end.

(END VIDEOTAPE)

SESNO: And we'll have more of this morning's New York Senate race when this special edition of CNN's election 2000 continues.

Coming up next, what makes a New Yorker?

I'm Frank Sesno. We'll be right back.

(COMMERCIAL BREAK)

SESNO: I'm Frank Sesno, and welcome back to this special edition of CNN's election 2000, highlights from this morning's New York U.S. Senate debate.

In this final segment, the candidates pitch their proposals to help address the nation's energy crunch and answer the burning question: What defines a New Yorker?

(BEGIN VIDEOTAPE)

KRAMER: Mrs. Clinton, there is a term that has been thrown around a lot in this campaign. Very simply, define a New Yorker.

CLINTON: Well, you know, E.B. White and others have done that over the years and what's so great about being a New Yorker or defining a New Yorker is that New York has always been a magnet for people from literally all over the world. People are drawn to New York because this is a place that you can stake your claim, you can build a future, you can dream your dreams. It is the place that my grandparents came through as well. And it is a place that I've always known, welcomed everyone from everywhere including immigrants from Washington, D.C.

(LAUGHTER)

So for me, New York represents the best, not just of America, but of the entire world. There isn't anyplace like it. I have had the most extraordinary time this -- more than a year now, 15 months traveling throughout this state and being in this city, going from neighborhood to neighborhood, from borough to borough, from county to county, and I've met people literally from all over. The Census Bureau says that 40 percent of the people living in New York City were not even born in this country.

We have the opportunity to demonstrate in New York that what it means to be a New Yorker is to be the best human being you can be, to do the best with your life you can do, to dream the biggest dreams and to get along with everyone else, to demonstrate that we can make this wonderful patchwork quilt of a place not only work but demonstrate to the rest of the world that people from different backgrounds and experiences not only can get along but build a better future.

KRAMER: Mr. Lazio, your 90 seconds.

LAZIO: Well, I think New Yorkers have a saying. They say, "You know, you got to tell it like it is." And for me in my life, I think very much a lot of New Yorkers can relate with the things I've been talking about. I can relate with their lives, the fact that we have a great melting pot here in New York. Our ethnic diversity is our strength. It's dynamic. It's changing. It's exciting. It's why people from throughout the world want to come to New York.

We're tough, bottom-line people. Let's face it. We want to see results. We want people who are going to be effective. We don't want to hear a lot of stories and talk. We have a respect for people to get the job done and to tell the truth. We have a history of rolling up our sleeves, of building the tallest building in the world at the time, the Empire State Building, calling it the Empire State Building, of building the Brooklyn Bridge, the Erie Canal, of doing the things that help build the name that we call our state, the Empire State.

I'm very, very proud to have been a life-long resident of this state, to have had all my roots here, my friends and my family from this state. And I'm going to be very proud next year to go back with the voters' help, and God willing, to represent this great state in a way that will make it proud.

KRAMER: Well, you know, it turns out you've been so good at answering your questions that there's time for just one more question. And it's going to go to both of you. You'll each have a minute -- Mr. Lazio will go first. It's a conservation question. There are a lot of people who think that we're using too much oil and too much gas, and the way to do it is to conserve, doing things like asking the gas companies to make sure that their tanks get 30 miles per gallon, reducing the speed limit to 55, things like that. Your position on that.

LAZIO: I absolutely believe that we have -- need to develop a comprehensive energy strategy. I think this administration has got no energy strategy. I think in a moment of candor last year, Energy Secretary Bill Richardson, who I really like and I've worked with as a House member, said we were caught napping. He was right. Well, maybe he understands it. Maybe they were outright snoring, quite frankly.

The fact is that there was no strategy to develop alternative, renewable energy sources. There was no strategy to ask the allies that we went to bat for in Kuwait and Saudi Arabia to respect our needs and to boost their oil production. There was no real strategy in terms of developing the kind of new energy technology like plug power up in Albany, cell technology that is incredibly promising.

We need to open up the grid to competition to drive down the price of energy. That will help create jobs, create a more favorable business climate in upstate New York and throughout the whole state of New York. I think those things are very important. I think we need to have access for both natural gas and for oil. We need to do a better job in building public and private partnerships to get that done.

KRAMER: Your time is up, Mr. Lazio.

Mrs. Clinton.

CLINTON: Well, I've spoken about the need for an energy policy for many, many months and that energy policy would, of course, include conservation members, possibilities that would include the kind of conservation tax credits that the Republicans have blocked for time after time in the last several years. The administration has put forth an energy policy that, you know, we just couldn't get through that Republican leadership that my opponent is part of.

Well, we need a new Congress that will take this energy conservation and energy efficiency issue seriously. I was pleased when the president did release some of the oil from the strategic reserve and it has resulted in lowering the price. But we've got to do a lot more. We need to make sure we have a Northeast oil reserve, something that I called for, my opponent missed the vote on and then Republicans in the House and Senate ripped it out of the final bill.

So we have work to do and it needs to be bipartisan, but it needs to be led by Democrats who understand that we shouldn't be beholden to big oil but instead should get out there and do what we need to do to be independent.

KRAMER: Mrs. Clinton, your time is up.

The question portion of the debate is now concluded. Now each candidate will have 60 seconds for their closing statements. By a flip of the coin, Mrs. Clinton will go first.

Mrs. Clinton. CLINTON: Well, I want to thank you all for giving us this opportunity to talk about the issues. You know, for months now, my opponent has been sending out a campaign fund-raising letter which says that, "All you need to know about this election are six words: I'm running against Hillary Rodham Clinton." Well, I think New Yorkers deserve more than that. How about seven words? How about jobs, education, health, Social Security, environment, choice? How about the issues that New Yorkers talk to me about and that I've been talking about as I've been running a campaign on the issues?

I want to go to the Senate to make sure we keep the economy strong, that we do what's necessary to bring down the national debt, preserve Social Security, provide a prescription drug benefit for Medicare and offer affordable tax cuts like making college tuition tax deductible. And I want to fight for education, for health care, for the environment and for a woman's right to choose.

Now those are the kinds of issues that I will work on because they are part of what I've done my entire life and part of what I've done in this administration. And I would appreciate your help and your vote to be able to carry on that work.

KRAMER: Mr. Lazio.

LAZIO: Thank you, Marcia. Thank you for the opportunity.

At the beginning of this 21st century, the outcome of this race will define what New Yorkers value most. Will it be bipartisanship and effectiveness? Will it be building alliances and working well with others? Will it be a proven record for the job, relevant experience and a life-long devotion to this state, New York? These are the qualifications that I bring to this position, a position of high trust to the United States Senate.

Now I think we have an opportunity here in New York. We have an opportunity to send a message nationwide. Let our message be that it's people rather than government that we trust most, that the most compassion is a plan that works, that the right incentives can make things better, and that if you don't stand up for something, you'll put up with anything. I ask for your support.

SESNO: Now when we come back, an assessment of today's face off with two of the Empire State's leading representatives here in Washington. And the question that stumped the candidates and turned out to be a hoax. We'll tell you about that too right after this.

(COMMERCIAL BREAK)

SESNO: And welcome back to CNN's Election 2000 coverage of today's New York Senate debate. I'm Frank Sesno in Washington.

Now coming up in just a few minutes, the season debut of "CNN & Time" presenting a two-part look at this week's stunning turn of events in Yugoslavia. But first, a bit more on this debate.

As you just saw, the questions during the debate were thoughtful and wide-ranging. But there was one question that we chose to save for now, one that stumped the candidates, much of the audience, and frankly those of us here at CNN. It concerned supposed legislation now before Congress which would allow the U.S. postal service to bill Internet users five cents for each e-mail they send.

But don't worry. There is no such legislation. The question came by e-mail and was false. The candidates were asked. And they answered.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SENATORIAL CANDIDATE (D-NY): I have been a supporter of a moratorium on taxation on the Internet. I do think we have to let loose this extraordinary communication device and see how far it can go in connecting people up. And I'd like to monitor this closely and take a look at it in the time when the moratorium expires.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. RICK LAZIO (R-NY), SENATORIAL CANDIDATE: We need to keep the government's hands off the Internet. This has a capacity for creating more jobs, more high-paying jobs for New Yorkers, than any other potential sector in the future. That's why I have voted for a moratorium on taxes on the Internet.

(END VIDEO CLIP)

SESNO: Now just to square the circle here, we did a little research, found out there is no such bill before the Congress. Turns out the rumor was circulated on the Internet and made its way to the debate.

The latest public opinion poll from the New York Senate race shows Mrs. Clinton with a slight advantage over Rick Lazio, by the way. The Quinnipiak (ph) College survey of voters done before the debate shows Mrs. Clinton with a seven-point lead over Congressman Lazio.

Will today's debate change those numbers? Joining us now, Correspondent Frank Buckley in New York, been covering this campaign for quite some time now, Frank.

First up, an overview. We heard those numbers from Quinnipiak. What does the scene look like?

FRANK BUCKLEY, CNN CORRESPONDENT: Well, Frank, that Quinnipiak poll that showed Mrs. Clinton at 50 was the second one to show her at 50, the second Quinnipiak poll to show her at 50, in about 10 days. And you might recall over the past several months, Mr. Lazio's campaign has been saying, "Well, Mrs. Clinton can't break through the mid-forties." Then, "Well, she can't break through the high forties." And now she has in fact hit 50 twice in about 10 days.

There is a feeling here that the momentum is certainly moving in Mrs. Clinton's direction, that Rick Lazio hasn't been able to articulate a message that cuts through the clutter that's out there, and hasn't been able to energize voters with a specific message. And so at this point, the consensus seems to be anyway that it's Hillary Clinton's election to lose.

SESNO: Frank, tick through just a couple of the issues for Mrs. Clinton and for Rick Lazio that are playing for and against each candidate for those who are not sitting home with a scorecard on a daily basis.

BUCKLEY: And you really have to have a scorecard in this race. In this race, Hillary Clinton has effectively been able to seize the agenda. And she's been able to run both a negative and a positive campaign at the same time.

Throughout the summer, she spent time defining Rick Lazio as a Newt Gingrich Republican, tried to move him further and further to the right in a state where Democrats outnumber Republicans three to two, trying to suggest that he's a Republican who's too conservative for New York.

She has also been able to go to places like upstate New York where traditionally it's a Republican base. This is where Republicans are supposed to dominate. And she has been able to set agenda up there by saying -- taking really a page from Bill Clinton's '92 campaign mantra "it's the economy, stupid," and saying that there are problems. There have been problems up here in upstate New York. The upstate area has not enjoyed the economic expansion that the rest of the country has enjoyed. And I am setting a specific agenda for you, or a specific plan for you, that will help to turn around the economy.

Now some would say the economy there has already turned a corner. But she has been able to do that.

Rick Lazio on his side has definitely going into the last few weeks of this race more money in terms of hard dollars. He has about $6.1 million, $6.2 million in hard money on hand. She has about $2.5 million in hard money. And that will buy for him a lot more air time in the final weeks of the campaign.

SESNO: Not much time left, Frank. Any headlines or major developments out of this debate this evening?

BUCKLEY: No, not really. I think the voters who were tending to support Rick Lazio. Those who were for Hillary Clinton will probably support Hillary Clinton.

SESNO: But what about that exchange on the campaign finance issue? BUCKLEY: I was just going to hit that, Frank. On soft money, was really the headline that may come out of this. Over the last 48 hours, that has been the story dominating here in New York.

There was a ban, an informal ban or an agreement between the two campaigns, if they would ban soft money and outside money from coming into the New York Senate race. It was deemed as potentially historic if it helped.

This week, Rick Lazio's campaign started running a commercial that was paid for in part by the Republican National Committee, clearly an outside group. But Lazio's defense has been, look, this was something that both campaigns agreed to. But because you are raising this as an issue, because you suggest that this ban will hold, I will in fact refund that money to the Republican National Committee.

This was an issue that Rick Lazio owned. He had been able to seize this particular issue on soft money, had really been able to bring this ban forward, despite the fact that Hillary Clinton months ago also issued a similar challenge. He's the one that really made it happen and now effectively may have lost a card on this particular issue.

And now reaction to today's Senate debate from New York state's congressional delegation. From our New York bureau, Republican Representative Peter King. Good to see you.

REP. PETER KING (R-NY): And you.

SESNO: And joining us -- hi. And joining us from Rochester, Democratic Congresswoman Louise Slaughter.

REP. LOUISE SLAUGHTER (D-NY): Good evening.

SESNO: Thanks to you. Good evening.

SLAUGHTER: Hi, Pete.

SESNO: I'm going to ask you both if I could to take it right off the top and in each case respond to what you thought was the most powerful moment by the person from the party you're not from. Representative King, you go first with Mrs. Clinton.

KING: I think probably her strongest point was when she defined what it is to be a New Yorker. I give her credit for that. I mean, that is the biggest rap against her, that she's not a native New Yorker. She's sort of like Louise Slaughter. She came in from the outside and is trying to get herself elected.

I think she gave a good definition, a very broad definition of what it means to be a New Yorker. I think that was her best point.

SESNO: Congresswoman. SLAUGHTER: I think the best thing is he didn't bully her today. And, Pete, it's really nice to be from upstate. And we can get elected up here.

SESNO: So you give him points for not...

SLAUGHTER: Even though we weren't born on the premises.

SESNO: All right, let's come to what Frank Buckley and I were just talking about, which was this issue raised in this debate over the soft money and the campaign finance. Is this a real issue between these two and something that's going to shape this race in any meaningful way, Congressman?

KING: Yeah, I think it's going to have an impact. I think Rick has been able to define this as an issue.

He's been able to take the offensive on it. And also, as a practical matter, it's going to help him over the last month because it looks as if he'll have probably about twice as much hard money to spend as Mrs. Clinton will. So I think it was both tactically and strategically for Rick the way he was able to handle it.

SESNO: So what you're saying is her charge that he broke this informal agreement that they had made 10 days ago, you don't think that lands.

KING: I don't think it will land at all. I think it sort of knocked him back a little bit yesterday and today. But again, there's 30 days to go. And the plus is that it was his agreement that was reached. And the bigger plus is that over the next 30 days, he'll have more than twice as much money as she will as the campaign comes in the final days where people are really going to be watching the race.

SESNO: Congressman Slaughter.

SLAUGHTER: It was his issue. It was his issue, but he stepped all over it, and he breached it. And I think when she pointed that out and made the very pointed statement that if you can't trust him for 10 days, how could you trust him for six years? And I think that's going to resonate.

SESNO: Representative Slaughter, there was a moment here where the debate moderator turned rather poignantly to Mrs. Clinton and said, "Many of our viewers and people who have sent us questions want to know again why you didn't leave the president." And it was later connected to a character question for Representative Lazio.

Is this something that people are listening to and counting on?

SLAUGHTER: I think it's something that's certainly been under the surface a little bit, Frank. And I have to be honest and say that I think for many women in this country when they found she was coming to New York to run for the Senate made an assumption that that meant she was coming by herself and that she was starting a new life. And when they found out that wasn't what she was going to do, for many of them it kind of puzzled them a bit. And they've been struggling to try to find out why not.

SESNO: Is it relevant in this race?

SLAUGHTER: However, it's such a personal issue. And I think she has had to struggle with this every time she's made any public statements and has said consistently the same thing, that she believes very strongly in keeping her family together.

SESNO: Is it relevant in this contest, though? Is it relevant?

SLAUGHTER: Well, it would not be asked of a man. Let me say that, although I hate saying that because it always sounds like a thing a woman would say. But I don't see any man ever being asked that question.

SESNO: Congressman?

KING: Let me just say, as a Republican, one thing we should have learned is we get nowhere by attacking either Mrs. Clinton or President Clinton for their personal life. So as far as I'm concerned, I don't think it should be an issue. And politically, I don't want it to be an issue.

I think that anyone who is against Mrs. Clinton because of what's gone on in her personal life with the president is going to be voting for Rick Lazio anyway. And in fairness to Rick, he's never raised this issue. He's made no attempt to. He wants to run this campaign on the real issues.

And I just think that both the electorate generally and Republicans in particular get nowhere in trying to make an issue out of this. And Rick, by the way, is not trying to make an issue out of it.

SESNO: Both of these candidates were asked about the Supreme Court and whether the Supreme Court's hanging in the balance isn't a compelling reason to vote for one candidate or another. Representative Slaughter, would you say that Hillary Clinton is using scare tactics here...

SLAUGHTER: Oh, no.

SESNO: ... when she suggests that Roe v. Wade and other weighty issues could be overturned?

SLAUGHTER: No. Absolutely not, Peter. We vote on almost a weekly basis in Congress. Frankly, if I could do anything on this issue, I would get Congress to stop practicing medicine without a license.

But it is critical. And there's no question that there will be new Supreme Court justices coming along and that Roe v. Wade we honestly do believe is hanging in the balance. SESNO: Congressman?

KING: I myself is pro-life, so I would actually have a different position from Rick on this. But from a pro-choice perspective, Rick Lazio is pro-choice. I think he's right in saying there should not be any litmus test applied to Supreme Court justices.

He mentioned Sandra Day O'Connor as the type of justice that he would support. And her record is probably very similar to Rick Lazio's in that she is -- in some cases, she comes down on the pro- choice side. Other cases, she comes down in what would be considered pro-life positions.

I think it's dangerous to start setting a litmus test, whether it's the pro-life forces that do it or the pro-choice. A Supreme Court justice has to be looked at in the entire perspective, not just from one particular issue.

SESNO: We have only about 30 seconds remaining. So I'd like to ask this question very briefly of you both. Having watched this debate, now the second debate, is this New York Senate race living up to all of its billing to be the ultimate race of this campaign season besides second only to the presidency, Congressman?

KING: Sure. I think it is. I think both of them are running very strong races. And Rick Lazio is coming on strong. He's running a good race.

But it really has generated attention. People are talking about it. I can't think of a Senate race, certainly going back to the Bobby Kennedy-Keating (ph) race in 1964, where there's been this much attention. You walk down the street, and you mention the Senate race, everyone knows what you're talking about.

Yeah, this has really galvanized the attention of the New York public from upstate to downstate and from East Side to West Side. This really is the race. They should charge admission.

SESNO: Louise Slaughter, 10 seconds.

SLAUGHTER: Well, I think that it is not probably the race to end all races. It's unusual to have a first lady running.

But frankly when they started this race, as you recall, everybody kept saying, "Oh, the New York media is going to eat her alive." But they haven't. They're very professional and very good. I'm sure there are races just as exciting perhaps in Virginia and Michigan and other Senate races that probably are even drawing more heat.

SESNO: Louise Slaughter, Peter King, thanks to you both very much.

KING: Thank you.

SESNO: Appreciate your time this evening.

SLAUGHTER: Thank you.

SESNO: And that concludes CNN's Election 2000 coverage of today's New York Senate debate. I'm Frank Sesno in Washington. Thanks for joining us.

Up next, Yugoslavia's October revolution. The season debut of CNN & TIME examining the fall of President Slobodan Milosevic begins right now.

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